Further to our recent post about the worldwide trademark trials and tribulations of Anheuser-Busch and its BUDWEISER trademark, we now report that the up-and-coming electric car manufacturer Tesla Motors Inc. has been sued in China for trademark infringement by a Chinese businessman who registered the rights to the TESLA mark in China before the US carmaker entered the Chinese market. As reported by Bloomberg, the owner of the Chinese registration, Zhan Baosheng, claims that his rights are being violated by all vehicle sales by Tesla in China and that he is seeking the shutdown of all Tesla showrooms, service centers, and supercharging facilities, the termination of all sales and marketing activities by Tesla in China, and the payment of $3.9 million in compensation for the allegedly infringing activity. Although Tesla successfully challenged the validity of the existing Chinese TESLA registration, that 2013 ruling by SAIC's Trademark Review and Adjudication Board is currently being appealed by Zhan Baosheng.
As advised in our BUDWEISER post, it is important to develop and implement an international trademark filing strategy well in advance of actually entering foreign markets. This is because trademark rights in most countries are granted to the first to register a mark without the need to prove use. Although there may be grounds to challenge foreign registrations obtained by "enterprising entrepreneurs," this process can be lengthy and expensive and there is no certainty as to its outcome. Certainly, the cost to file trademark applications during the early stages of a company's international expansion plans will be far less than the cost for an attempted recoupment of rights.
So, start early, plan strategically, and move expeditiously to avoid the usurping of your trademark rights in other countries.